Understanding Etiquette and Business Culture in South Korea
Understanding etiquette and business culture in South Korea is too often underestimated when foreign companies plan market entry. South Korea is a culturally rich country with rapid technological advancement and business opportunities. Even though it is a global leader in digital technologies, forward thinking in AI, and big data, it still holds traditional values in high regard.
Deeply embedded in its culture, starting a business in South Korea can be a tough line to walk. If you’re not careful, you can unintentionally offend locals with your customary business practices. To avoid that from happening, it’s wise to watch out for the variety of etiquette and business cultures in South Korea. This guide will outline the essential formalities you need to keep an eye on.
Top 4 Core Business Cultures in South Korea
- Working hours
South Korea has a standard working hour of eight per day and 40 hours per week. However, business hours usually start from 9:00 AM to 6:00 PM, and it’s not uncommon for employees to work overtime. A strong work ethic is typical of South Korean employees. It reflects the country’s perception of dedication and corporate commitment. So, if you’re planning on establishing a foreign company, you need to tailor it to a more rigorous pace.
- Structure of business meetings
Punctuality is expected. In South Korean culture, tardiness will leave a bad impression, even if it’s only a few minutes late. After you’ve arrived, exchanging business cards is a must. When presenting or receiving a business card, you have to hold it with both hands facing the recipient. Then, you have to put it on the table in front of you and refrain from keeping it in your pocket.
On the meeting timeline, you have to prepare a clear agenda with thorough details on what has to be covered in each session. Time is precious, and wasting it on an ineffective meeting will put off potential business partners. Speaking of efficiency, the order of speaking is usually predetermined, with the most senior person sitting at the head of the table and being the one to open it with introductory remarks.
- A digital-first business mindset
As one of the most technologically advanced countries in the world, digital platforms are a mainstay of conducting business in South Korea. From scheduling to project management and file-sharing collaboration, expect cutting-edge software to be a mandatory service in your day-to-day business. Some of the software commonly used include WEHAGO, QuickBooks, moCal, and KakaoTalk.
- Chaebols and their major roles
Unlike other countries, South Korea has a distinct custom that dominates its business landscape: Chaebols. In short, Chaebols are large, family-owned conglomerates that wield significant influence over the country’s culture, politics, and economics. They span multiple industries, from automotive to electronics, accounting for more than 40% of South Korea’s gross domestic product (GDP). And that’s just from the top four companies, which are Samsung, Hyundai, LG, and SK Group.
Top 4 Etiquettes when Doing Business in South Korea
- Respect for hierarchy takes priority
Just like knowing the leading businesses in South Korea will help you better understand their professional climate, reading the room is an essential habit to practice in any Korean workplace. South Korea takes authorities and corporate hierarchy seriously. Decisions are made top-down, and respect for superiors is imperative. As a foreign company, respecting local business customs is not only recommended but required.
- The importance of gift-giving
In South Korea, gifts are often exchanged between business partners as a sign of goodwill. These could happen on occasions like the beginning of a business meeting or during major holidays like Chuseok (Korean Thanksgiving). Popular gifts include cash, red ginseng, Hanwoo (Korean beef), Hangwa (traditional sweets), liquor, Spam, seasonal fruits, and daily necessities.
- Warming up to a professional relationship
If you want to maintain a long-lasting business relationship in South Korea, you need to have patience and be conscious of their lifestyle. Some of the ways you can achieve this are through having casual drinks and eating out with potential partners. You can find the most natural occasion to approach them right after a meeting.
South Korean business culture is based on trust. You can’t rush a professional relationship. Foreigners need to be willing to invest time and effort into building a proper rapport. But once you’ve put in the work, it will pay off a great deal. Having a reliable local partner will give you an unmatched edge in the competitive South Korean market.
- Reserved and dignified communication style
The foundational tenet of South Korean business etiquette is Kibun. It’s a key Confucian value that prioritizes harmony and well-being. In practice, this means that South Korean employees and business owners consider their reputation to be of utmost importance. They regularly save face to avoid humiliation and preserve their dignity.
If you’re used to conveying your opinions directly, you may need to rein in your bluntness. Being cautious is crucial in South Korea. Even when making a business deal, detailed contracts are preferable to avoid miscommunication. Final decisions are reviewed meticulously and made based on consensus.
How Double M can help your business integrate seamlessly in South Korea
Every country has a unique culture, and culture is intertwined with business negotiations and trade. So, if you want to form a successful foreign company in South Korea, it is paramount that you get accustomed to its many local cultures and etiquette. As detailed above, the business culture in South Korea, such as working hours, the structure of business meetings, frequently used software, and Chaebols, is important to learn. Moreover, etiquettes like respect for hierarchy, gift-giving, how to conduct a professional relationship, and local communication styles must also be kept in mind.
If you’re overwhelmed with the dense planning and preparation required before diving into the business culture in South Korea, Double M is here to assist you. Contact us with any questions, and we will guide you through all the requisite rules for entry. Our services range from tax planning, bookkeeping, legal consultation, B2B matchmaking with local partners, and market trends analysis. Start your journey with us now!